European expatriates in Spain's Valencia region who were under threat of losing free access to healthcare have won a partial reprieve. Restrictions announced last month on the right to state healthcare provision were aimed primarily at non-working expats below pension age.

From June 5, foreign nationals not contributing to the Spanish social security system lost their right to healthcare in the region unless they had one of two forms:

• the E121, issued to British men at 65 and women at 60; or

• the E106, extending access to state health services for up to 2½ years after an individual ceases working.

However, the British Embassy in Madrid advised individuals affected to buy private medical insurance.

Consternation was widespread because some expats would not have budgeted for health cover before moving to Spain. But greater concern was felt by those who could not get private cover because of an established chronic ­illness, such as heart trouble, diabetes or asthma.

The situation broadly ­paralleled that in France last year, when President Nicolas Sarkozy made private insurance mandatory for expat early retirees.

The move prompted an outcry from the expatriate community, threats of legal action and diplomatic exchanges between London and Paris.

Mr Sarkozy got his way in the long term, but those already in the system were allowed to continue.

Valencia too has moved to compromise. It is offering early retirees continued access to its hospitals and clinics in exchange for a monthly ­contribution. Crucially, there will be no discrimination against those with pre-existing­ conditions.

In addition, Valencia has deferred implementing the plan until January 15 next year. Anyone holding a health card, or SIP, due to expire before the January deadline will have it extended.

Valencia in essence will be running a premium-based state medical insurance scheme for certain expat ­categories, but without penalising sufferers with chronic diseases.

The big unknown is the size of the monthly contribution, a premium by another name. However, the British Embassy said it had been assured that the sum would be "reasonable and affordable".

The embassy emphasised that expats who had other means of accessing the health system would be excluded from the new arrangements.

Its statement said: "Anyone who renewed their SIP card before June 6, 2008 will have the full 12 months' cover until the card expires - eg, if you renewed your card or joined the scheme in May, you will have cover until May 2009."

The embassy said the regional government believed that about 1,600 Britons were affected.

Chris Barkell, the marketing director of insurer Exeter Friendly Society, which is active in the region, was not surprised by the crackdown.

He said many non-working expatriates under retirement age were not contributing to the health ­system and were gambling on using a European Health Insurance Card (Ehic). "They have been on a free ride," he said. "The Ehic is intended to cover emergency medicine only."

Full story from telegraph.co.uk